West Virginia court rules that gender-affirming surgery should be paid for by tax payer, in landmark decision

Gender-affirming surgery must be paid for by state healthcare plans, a Richmond court has ruled.

The federal appeals court is the first in the country to say that transition should be covered for transgender people with government-sponsored insurance.

The decision arose out of a set of cases in North Carolina and West Virginia, in which transgender residents argued that their surgeries should be funded by either employee health plans or state-subsidized Medicaid.

State officials said that their policy of not covering transgender surgeries was based on financial concerns and not bias.

Connor Thonen-Fleck addresses reporters while his parents stand by his side, March 11, 2019, in Durham, N.C. West Virginia

But the Richmond-based 4th US Circuit Court of Appeals ruled 8-6 in the case on Monday.

The courts decision does not mean that transition will automatically be covered for transgender people with government-sponsored insurance. The ruling could be appealed in the Supreme Court, which recently allowed Idaho to enforce a ban on gender-affirming care for minors. 

But the powerful Court has been somewhat unwilling to engage on the issue and has allowed multiple 4th Circuit rulings supporting transgender rights stand.

In West Virginia, transgender Medicaid users challenged the state's policy, which has by law banned the funding of 'transsexual surgeries' since 2004. 

In North Carolina, state employees challenged their coverage which has not covered surgeries for gender dysphoria since 2018.

In January, Ohio become the 23rd state to ban transgender care for minors, amid a wave of laws passed by Republican-controlled legislatures in recent years.

'The coverage exclusions discriminate on the basis of sex and gender identity, and are not substantially related to an important government interest,' Judge Roger Gregory, first appointed by former President Bill Clinton and re-appointed by former President George W. Bush, wrote in the majority opinion.

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The ruling follows a decision earlier this month by 4th Circuit judges that West Virginia's ban on transgender girls competing in sports as girls, and vice versa, is unlawful due to a federal civil rights law that prohibits sex-based discrimination in schools.

Like with the transgender sports law ruling, West Virginia Attorney General Patrick Morrisey said his office planned to appeal Wednesday's health care case decision.

'Decisions like this one, from a court dominated by Obama- and Biden-appointees, cannot stand: we'll take this up to the Supreme Court and win,' Morrisey said in a statement.

After the ruling, West Virginia plaintiff Shauntae Anderson, a Black transgender woman and West Virginia Medicaid participant said: 'I am so relieved that this court ruling puts us one step closer to the day when Medicaid can no longer deny transgender West Virginians access to the essential healthcare that our doctors say is necessary for us.'

A spokesperson for North Carolina State Treasurer Dale Folwell, whose department oversees the state's health plan, said the agency was still reviewing the decision Monday but would have a response later.

During oral arguments in September, at least two judges said it's likely the case will eventually reach the US Supreme Court. 

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Both states appealed separate lower court rulings that found the denial of gender-affirming care to be discriminatory and unconstitutional. 

Two panels of three Fourth Circuit judges heard arguments in both cases last year before deciding to intertwine the two cases and see them presented before the full court.

In June 2022, a North Carolina trial court demanded the state plan pay for 'medically necessary services,' including hormone therapy and some surgeries, for transgender employees and their children. 

The judge had ruled in favor of the employees and their dependents, who said in a 2019 lawsuit that they were denied coverage for gender-affirming care under the plan.

The North Carolina state insurance plan provides medical coverage for more than 750,000 teachers, state employees, retirees, lawmakers and their dependents. While it provides counseling for gender dysphoria and other diagnosed mental health conditions, it does not cover treatment 'in connection with sex changes or modifications and related care.'

In August 2022, a federal judge ruled West Virginia's Medicaid program must provide coverage for gender-affirming care for transgender residents.

An original lawsuit filed in 2020 also named state employee health plans. A settlement with The Health Plan of West Virginia Inc. in 2022 led to the removal of the exclusion on gender-affirming care in that company's Public Employees Insurance Agency plans.

During September's oral arguments, attorneys for the state of North Carolina said the state-sponsored plan is not required to cover gender-affirming hormone therapy or surgery because being transgender is not an illness. 

They claimed only a subset of transgender people suffer from gender dysphoria, a diagnosis of distress over gender identity that does not match a person's assigned sex.

Before offering pharmaceutical or surgical intervention, medical guidelines call for thorough psychological assessments to confirm gender dysphoria before starting any treatment.

West Virginia attorneys said the US Centers for Medicare & Medicaid Services has declined to issue a national coverage decision on gender-affirming surgery.

State lawyers said West Virginia's policy is not a case of discrimination, either, but of a state trying to best utilize limited resources. West Virginia has a $128 million deficit in Medicaid for the next year, projected to expand to $256 million in 2025.

Unlike North Carolina, the state has covered hormone therapy and other pharmaceutical treatments for transgender people since 2017.